Online Reporter
Government procurement has been continuously tightened over the past few years by the Second Republic as each weakness was identified, with State procurement officers made to assume far greater responsibility in going through each deal and then enforcing quality and costing standards.
At the same time a double system of checks was put in place beyond simple reliance on audits over a year later to make corruption and simple inattention to detail far more difficult, the procuring ministry having to make its own assessments and then have these checked out by the Ministry of Finance, Economic Development and Investment Promotion before any payments were made.
But there is always room for improvement, and systems need to be continually improved to make sure that contractors are not taking the Government for a ride and that the taxpayers are getting maximum value for the money they are legally obliged to hand over at regular intervals.
With the latest set of efforts to incorporate the informal sectors into the formal tax-paying economy, there are many more taxpayers, and they all have made it clear that they want their money spent properly. A lot of the problems that centred on inefficient or corrupt politicians and civil servants have largely been beaten back thanks to the ruthless anti-corruption drive of the Second Republic.
This has seen prosecutions and civil seizures of tainted assets and we now see a reasonable flow of clean audit reports as the successes mount up.
There are still problems in the local government arena, especially in urban councils and from what is now being uncovered, in particular in Harare City Council, the largest.
But again President Mnangagwa, having insisted on the central Government clean-up with his full backing, is now insisting on the same clean up in local government. Obviously the systems put in place to prevent corruption, and which are now being extended into local government, need to be maintained and extended, but very largely we now know what corrupt officials can do and we are on our guard to prevent them from doing it.
Improvements in procurement systems in this area are largely making sure that the potentially dishonest cannot make dishonest decisions because they will be quickly found out and that the actual dishonest spend some time in a prison cell.
What are now far more common procurement problems centre on pricing and standards, and here the Government is now upgrading its procurements systems with inter-ministerial committees and other significant changes. What has been increasingly seen as a problem is a type of dishonesty among some of those tendering for Government contracts and dishonest or dubious behaviour among those who win the contracts. A fair amount of this totally undesirable activity is not necessarily criminal although it is totally undesirable.
There is nothing criminal about a supplier quoting an outrageous price although if they bribe a politician or civil servant to accept that price then we have a crime.
The Zimbabwean economy is fairly small. This means that reliance on pure competition to get the lowest possible price is not always effective, as there might either be only one serious contender for a contract, or a formal or informal cartel or even just a vague understanding among a small group of suppliers. This would include a small group of potential contractors wallowing in the same levels of inefficiency, or pegging themselves to the largest and its inefficiencies and practices.
Foreign contractors, of course, have far fewer inhibitions about milking Zimbabwe, even if they adorn this as accounting for risk.
While it is permitted to quote in US dollars, with payment in many cases to be in ZiG at the prevailing rate of exchange on the date of payment, there have been numerous cases of potential suppliers using black market rates in a way that avoids a direct crime.
They start off with the real price, convert this to ZiG at the black market rate, and then convert that figure back to US dollars at the official rate to get a higher US dollar price. This is done since they plan on selling the ZiG they receive on the black market when they do actually commit a crime, but only at the very end of the process. Many go even further and do the first conversion at what some bar-room guru predicted would be the black market rate in a few months.
Others, vaguely less dishonest, feed in what they think the black market rate might be when they dump their own ZiG into the black market as a result of that dumping.
Even when there is apparent competition, the number of suppliers is so small that it is very easy for them to meet and collaborate in price fixing or at least compare notes and without actually agreeing to anything dishonest, at least make each other aware of what they would like, perhaps during a round of golf. This is one problem the Government needs to sort out, so that competition is real, not pretend.
This is more difficult than ending corruption, because over charging is not criminal, just stupid in a properly competitive environment since the over-chargers then sell nothing. But there is a tendency for businesses to follow each other, even when they are not in formal alliance, and that needs to be broken.
A fair amount of progress has been made by the Finance Ministry, now obliged to check each contract price before payment, first looking at the prices in the general local and global markets, and these days making the procuring ministry do the same. That needs to be continually upgraded.
This still leaves the problem when the local suppliers as a group overcharge and there is no alternative, but then it can be made clear that the Government can always set up its own unit. Having sorted out a lot of the corruption and inefficiency in Government, that has now become a real option in many cases.
A lot of infrastructure used to be built by Government departments, which now tend to be limited to design, setting of standards and final inspection. But if contractors mess around on pricing and financial factors and compromise the standards, we can always return to what is in theory a more inefficient system, but which can outcompete a dubious private sector.
Public-private partnerships at most levels, from basic contracting all the way to long term financing arrangements should in many cases give the best value for money by a significant margin. But if that is not the case then they just a way of battening onto the Zimbabwe taxpayer.
daniel chigunwe
